Garuda Indonesia Allocates Funds from 2022 Rights Issue for Operational Needs

Garuda Indonesia (GA), based in Jakarta Soekarno-Hatta, has revealed the allocation of funds from its 2022 public rights issue, outlining how it has utilized a substantial portion of the IDR7.79 trillion (USD518.4 million) raised. The allocation breakdown, as reported in a stock market filing on July 17, includes:

• IDR1.656 trillion (USD110.2 million) directed towards maintenance and restoration requirements.
• IDR810.8 billion (USD54 million) earmarked for future maintenance needs.
• IDR1.73 trillion (USD115.1 million) designated for fuel costs.
• IDR900 billion (USD59.9 million) allocated to cover aircraft lease expenses.
• IDR275.9 billion (USD18.4 million) directed to other working capital needs.

Following the payment of IDR21.51 billion (USD14.3 million) associated with the rights offering, Garuda Indonesia retained just over IDR2.03 trillion (USD135.4 million), which was invested in a short-term deposit fund offering a 4% annual interest rate.

The rights issue, which saw the Indonesian government participate as the majority shareholder with a 59% stake, played a pivotal role in Garuda Indonesia’s successful completion of a restructuring and court-supervised business rehabilitation phase. As part of its fleet, the airline operates five A330-200s, twelve A330-300s, five A330-900Ns, thirty-eight B737-800s, and eight B777-300ERs. Currently, 55 of the 68 aircraft are operational. Garuda serves 52 destinations in 12 countries, often routing through its subsidiary, Citilink (QG, Surabaya), particularly for relaunched international routes.

For the first quarter of 2023, Garuda Indonesia reported a net loss of IDR1.61 trillion (USD107.1 million), marking a notable 51% improvement compared to the same period in 2022. CEO Irfan Setiaputra expressed optimism, citing an 87% increase in flight revenue during Q1 2023 compared to the previous year’s quarter, along with a 50% rise in income from other sources. The airline’s positive outlook extends throughout the remainder of the year.

Sources: AirGuide Business airguide.info, msn.com, Garuda Indonesia